Out of the six transactions, FGV said the forensic investigators have completed the probe on four transactions, which included the RM628 million acquisition of Asia Plantations Ltd (APL) in 2014, investment in FGV Cambridge Nanosystems Ltd and the acquisition of luxury condominiums at The Troika in Kuala Lumpur City Center.

Apart from the six transactions, FGV said its board of directors had also undertaken an internal probe into six other matters that are lumped under three categories.

The first is related to open credit lines, poor purchasing trading practices and poor palm oil sales that have resulted in bad debts of approximately RM100 million.

The second category is related to the direct award of procurement contracts, which was deemed to be in breach of best corporate practices, and the third category is linked to the labour shortage between May 2016 and April 2018, resulting in financial losses exceeding RM170 million.

“The board is reviewing all the above-mentioned findings and has sought legal advice on the possible legal recourse,” FGV said, adding that it will make further announcements on the next course of action after it has been duly advised.

FGV said it had established a Transformation Office (TO) in April 2018 to assess the unfavourable performance of the company.

FGV said the TO is in the process of finalising audits into estate and mill operations and downstream processes, and the final report will be submitted to the board of directors in the next few weeks

“Early findings reveal serious issues at multiple levels within the organization, ranging from poor work discipline, operational inefficiencies to leakages that need to be addressed immediately,” it added.

FGV also revealed that it had July 5, 2018, established a three-member Special Board Committee (SBC, which is headed by its chairman Datuk Wira Azhar Abdul Hamid and two other directors — Datuk Dr Salmiah Ahmad and Dr Nazeeb Alithambi).

FGV said the creation of the SBC was in view of the many operational shortfalls and the inability of management to offer convincing explanations, solutions or strategic plans for the company.

FGV said the SBC was tasked with four mandates: monitor the performance closely, engage directly with the group president and chief executive regularly on the progress of key result areas, ascertain the sufficiency of steps being taken and planned, for the attainment of such key result areas and to make such recommendations and give directions to the management where appropriate.

Not long after its set up, FGV said the SBC has identified five immediate key recommendations, some of which include reviewing the group’s entire procurement function by the Board Tender Committee led by Datuk Siti Zauyah Mohd Desa, the current deputy secretary general of policy at the Finance Ministry.

In addition, FGV said the SBC is empowered to appoint key individuals to several critical management functions, restore operational integrity and ensure the implementation of best management practices in all the group’s business units.

FGV said SBC’s recommendations were approved by the board of directors in a meeting on Aug 28, 2018.

Meanwhile, FGV said its board of directors has committed to undertake several steps, which include transparent and timely disclosures of the findings, and review the group’s non-core businesses with a view to unlock value and to redirect resources towards core businesses

FGV said the board will also announce in due course, an operational turnaround plan which is performance centric, focused on profitability and returns, with clear and measurable deliverables.

“It is the Board’s view that with a performance centric management team, FGV will be able to extract much more value from its assets than it has in the recent past,” Azhar said.

“Right now, there are several leaks that have to be plugged and process improvements, which when implemented, will lead to immediate bottom-line improvement,” he added.